The planned initial public offering of SeaWorld Entertainment Inc. is about to get a lot larger than previous estimates. The operator of SeaWorld, Shamu and Busch Gardens brands now plans to raise as much as $500 million. The IPO is for affiliates of the Blackstone Group L.P. (NYSE: BX) and was originally set for up to $100 million.
Investors will be shocked at the sheer size of the underwriting group, and while there are 13 firms mentioned in the syndicate, we are limiting it to the bookrunners because of the size. They include Goldman Sachs, J.P. Morgan, Citigroup, BofA/Merrill Lynch, Barclays and Wells Fargo Securities.
During 2012, the entire amalgamated outfit was listed as hosting more than 24 million guests, including approximately 3.5 million international guests. SeaWorld’s company sales in 2012 were $1.423.8 billion, and net income came to $77.4 million.
The company said of its use of proceeds:
We will not receive any proceeds from the sale of shares of our common stock by the selling stockholders. … We intend to use a portion of the net proceeds received by us from this offering to redeem $140.0 million in aggregate principal amount of the Senior Notes at a redemption price of 111.0% pursuant to a provision in the indenture governing the Senior Notes that permits us to redeem up to 35% of the aggregate principal amount of the Senior Notes with the net cash proceeds of certain equity offerings and to pay approximately $15.4 million of redemption premium, plus accrued interest thereon. As of December 31, 2012, $400.0 million aggregate principal amount of the Senior Notes was outstanding. The Senior Notes mature on December 1, 2016 and have an interest rate of 11.0%.
SeaWorld intends to use the remaining proceeds to pay toward its term loans. Outside of the description above, SeaWorld should require very little explaining about what the theme park operator does.
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